Slouching Towards Utopia?: The Economic History
of the Twentieth Century

-XXVI. The Fall of the Soviet Union-

J. Bradford DeLongUniversity of California at Berkeley and NBER

February 1997

Leonid Brezhnev:

The person who saw this most clearly was the German classical liberal
Max Weber. He saw that socialism would become nothing but a synonym for
bureaucratic despotism. And:

History shows that wherever bureaucracy gained the upper hand, as in
China, Egyptit did not disappear. A progressive elimination of private capitalism
is theoretically conceivable. What would be the practical result? The destruction
of the [dehumanizing] steel frame of modern industrial work? No! [S]imply
that also the top management of thesocialized enterprises would become
bureaucratic.[T]here is even less freedom, since every power struggle with
a state bureaucracy is hopeless.

State bureaucracy would rule alone if private capitalism elminated.
The private and public bureaucracies, which now check one another to a degree,
would be merged into a single hierarchy. This would be similar to the situation
in ancient Egypt, but it would occur in a much more rational[ized]-and hence
unbreakable-form.

[Bureaucracy t]ogether with themachineis busy fabricating the shell of
bondage which men will perhaps be forced to inhabit as powerless as the
fellahs of ancient Egypt. Who would want to deny that such a potentiality
lies in the womb of the future

This was written in 1917. Weber was right. From the perspective of 1990
there is little to add. One slogan of the turn of the century American labor
movements was "one big union." The slogan of twentieth century
socialism might as well have been "one big bureaucracy."

Weber did not note the corruption (and the related economic disruption
and waste) that would come to dominate "socialist" economies,
and Weber had no inkling of the periodic waves of mass terror required to
preserve Communist Party power in the face of the enormous gap between the
party's official ideology and its actual practice. In fact, socialism
turned out in the direction that but much worse than Weber had anticipated
beforehand.

The principal reason that Marx feared market economies turned out to
be false: they did not have a powerful inner dynamic leading to a polarization
of the distribution of wealth. This had become clear by 1883, or at least
by 1900, even though it had not been clear in 1848. The appropriate reaction
to the fact that growing material wealth was trickling down should have
been enthusiasm. Markets are powerful instrumentalities for controlling
and guiding persons and organizations. They generate a rapid pace of innovation,
provide for efficient recombinations of factors of production into
new enterprises, and pressure large organizations toward effective fulfillment
of their productive missions. To the extent that markets can be harnessed
for the purpose of building Utopia, scarce public administrative capacities
and competencies can be redirected to other uses. A society that can harness
markets uses a form of sociological judo, applying small amounts of pressure
at key points to make inertia push results in desired directions.

But the response of those who had positioned themselves left of social
democracy was not enthusiasm that it would be easier to approach utopia
than Marx had expected. Instead, the response was the continued denigration
of systems that assigned a prominent role to either private production or
market exchange, and a worship of hierarchical administration and bureaucracy-under
the name of "conscious social control and administration of production
for use"-as the answer to all problems. Whatever utopia is, it does
not consist of one big corrupt bureaucracy. And so the left has had little
constructive to offer social democrats and others trying to manage and reform
the "mixed economies" of the twentieth century.

Doublethink

Paul Sweezy, The Present as History (New
York: Monthly Review Press, 1953).
p. 50-1: "Burnham alleges that[for] a society [to be] socialistit must
be. fully democraticWithout entering into a discussion of the precise
meaning of the term `democracy', we may agree that socialism has been historically
thought of as `fully democraticin all spheres'. We may also agree that this
does not apply to the Soviet Unioni in the political sphere, where there
is a single-party system and certain restrictions on civil liberty. At the
same timethere is more genuine democracy in the economic and social spheres
in the Soviet Union than anywhere else in the world."

p. 62: "From the standpoint of economic science, the political leadership
in the Soviet Union is acting as the agent of the working class. No relation
of exploitation exists between controllers and workers.The real issue is
one of general interests and objectives, which are prescribed by the structure
and form of social relations as a whole. In this sense the objective of
those who direct the Soviet economy can only be production of use values
which corresponds in every way to the interests of the working class. We
might, therefore, say that the working class is the ruling class in the
Soviet Union."

p. 76: "those who understand that in essence Marxism is a method of
analysis and a guide to actionwill be in little doubt that Schwartz has
mistaken the enrichment of Marxism by the two great twentieth-century revolutions
[of Lenin and Mao] for its decomposition."

p. 286: "[Hayek] even goes so far as to compare Nazi anti-semitism
with the liquidation of the kulak in the USSR. The two things, of course,
have absolutely nothing in common. The Jew remains a Jew; the kulak could,
and most of them did, become a collective farmer on exactly the same terms
as his fellows."

p. 352: "The publication in 1952 of Stalin's Economic Problems of
Socialism in the USSR would make possible today a more satisfactory
reply.In the light of [Stalin's] explanation I would like to amend the statement
which Mr. Kazahaya criticizes.[The amended statement] conveys my meaning
more accurately than the original wording and is, I think entirely in accord
with Stalin's view."